Two power plants are currently emitting 8,000 tons of pollution each (for a total of 16,000 tons) in City A. Marginal pollution reduction costs for Plant 1 are given by MCR1 = 0.02 Q1 and for Plant 2 by MCR2 = 0.03 Q2, where Q represents the number of tons of pollution reduction.
(1) Suppose a regulation is implemented that requires each plant to reduce its pollution by 5,000 tons. What will be each plant’s pollution reduction costs?
Hint: Draw two graphs (one for each firm), similar to Figure 8.4 on page 184.
(2) Instead of the pollution standard in Question (1), a pollution tax of $120 per ton of pollution emitted is implemented.
How much will Plant 1 now pay in pollution reduction costs (with tax)?
How much will Plant 2 pay in pollution reduction costs (with tax)?
How much will be the total pollution reduction costs with tax for the two plants together?
Compare the total pollution reduction costs (with tax) estimated in Question (c) to the total reduction costs by the regulation in Question (1). Which policy is economically efficient? Why?
(3) Finally, suppose a tradable permit system is institutes in which permits for emissions of 6,000 tons of pollution are freely issued, that is, 3,000 permits to each plant.
What are the pollution reductions costs to each plant without trading?
Hint: Draw a graph similar to Figure 8.6 on page 186, showing 10,000 tons of total pollution reduction.
With trading, explain which plant will sell permits and how many permits the firm will sell.
Hint: Use the graph you drew in Question (a).
Assuming all permits sell for the same price, calculate each plant’s net costs after trading, considering their pollution reduction costs and the costs (or revenue) from the permit sale.
Calculate the total pollution control (or reduction) costs for the two plants together.
Thank you. I will get back to you next week. There are more classes that I need help.
Client #23605
Verified order
Thanks a lot. All good
Client #0
Verified order
I loved the service it was really fast & efficient. I ended up with an A in my class!
Client #0
Verified order
It was a pleasure working with you. You are really responsible and always do you’re best and of course, we will keep working together.
Client #23592
Verified order
The essay and the Excel file looks good. Thank you for working with me throughout the project.
Client #23592
Verified order
Thank you for the quick help. I was stuck.
Client #23594
Verified order
You are a lifesaver. Thank you. I will be needing your help for the midterm exam.
Client #23594
Verified order
I am very grateful for your help. Without you, I would have quit a long time ago. Appreciate your help 100%.
Client #23599
Verified order
I know it is APA 7 and it should not have the running headers, but my professor insists on them. Please include them in the upcoming orders. Overall, I liked it and I will be submitting it tonight. Thank you.
Client #23596
Verified order
Thank you for the help. All good.
Client #23595
Verified order
You do an exceptional job, have gotten good grades n positive feedback/ comments from my professors since you started helping me.
Share all the assignment information. Including the instructions, provided reading materials, grading rubric, number of pages, the required formatting, deadline, and your academic level. Provide any information and announcements shared by the professor. Choose your preferred writer if you have one.
Get Your Order Assigned
Once we receive your order form, we will select the best writer from our pool of experts to fit your assignment.
Share More Data if Needed
You will receive a confirmation email when a writer has been assigned your task. The writer may contact you if they need any additional information or clarifications regarding your task
Let Our Essay Writer Do Their Job
Once you entrust us with your academic task, our skilled writers embark on creating your paper entirely from the ground up. Through rigorous research and unwavering commitment to your guidelines, our experts meticulously craft every aspect of your paper. Our process ensures that your essay is not only original but also aligned with your specific requirements, making certain that the final piece surpasses your expectations.
Quality Checks and Proofreading
Upon the completion of your paper, it undergoes a meticulous review by our dedicated Quality and Proofreading department. This crucial step ensures not only the originality of the content but also its alignment with the highest academic standards. Our seasoned experts conduct thorough checks, meticulously examining every facet of your paper, including grammar, structure, coherence, and proper citation. This comprehensive review process guarantees that the final product you receive not only meets our stringent quality benchmarks but also reflects your dedication to academic excellence.
Review and Download the Final Draft
If you find that any part of the paper does not meet the initial instructions, send it back to us with your feedback, and we will make the necessary adjustments.